Davis was drafted in the fourth round (103rd overall) in the 1996 NFL Draft by the Washington Redskins.[5] Davis was primarily used as a fullback, and was part of the Redskins' backfield with Terry Allen. He spent three seasons as a backup and fullback before getting the starting nod at the start of the 1999 NFL season. This was Davis' breakout season, when he posted career highs, and ended up representing the NFC in the Pro Bowl. He led the NFC in yards rushing with 1,405, and led the league in yards per carry (4.8). He was also the league's leading non-kicking scorer, posting 108 points on 17 touchdowns and one two-point conversion. He continued to post high numbers the following season en route to his second straight Pro Bowl selection. In 2001, Davis rushed for 1,432, breaking the record he had set in 1999 for most rushing yards in a season by a Redskin.

Said Football Outsiders about Davis's 1999 season, "Stephen Davis was just a monster in 1999 with 1407 yards (second in the league) and 17 touchdowns (nobody else scored more than 13). He led the league with a 60% success rate, and nobody else with at least 75 carries was over 55%." [6]

Davis signed with the Carolina Panthers for the start of the 2003 NFL season, and was a catalyst in leading the team to Super Bowl XXXVIII. Davis rushed for a career-high 1,444 rushing yards and eight touchdowns. He also finished in the top three for the NFL MVP voting that year. Davis led all rushers in the postseason with 315 yards. Unfortunately for Davis, he suffered an injury early the following season, and was one of fourteen Panthers on injured reserve as the Panthers struggled to a 7-9 record. He was also on the injured list early in the 2005 season, but came off the bench after a few games before being forced to sit out the remainder of the season with nagging knee injuries. Davis was released by the Panthers on March 1, 2006.

On February 27, 2008 Davis signed a one-day contract with Carolina so he could officially retire as a Panther; he did so the next day on February 28, 2008. Later, in 2012, he came forth with reports about suffering from tinnitus and other concussion related side effects.

Davis was the Carolina Panthers' minority coaching intern for the 2010-11 season.[7]